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An
Empirical Analysis of the Factors Influencing `Going
Public' Decision of Indian Companies
-- Manas
Mayur and Manoj Kumar
This
paper examines the determinants of the `going public' decision of Indian companies
using the probit regression model. The paper finds that factors such as size,
profitability, age and leverage emerge as the significant determinants of `going
public' decision of Indian companies. Further, the study finds that financing
needs and likelihood of an IPO are not related. ©
2007 IUP . All Rights Reserved.
Informational Role
of Non-price Variables: An
Empirical Study of the Indian Options Market
-- Kedar
Nath Mukherjee and R K Mishra The
`informational role of the options market in predicting the future price index
in the underlying cash market in India' is studied in this paper by applying the
method of open interest and volume-based predictors (Bhuyan and Yan, 2002). Daily
data for both price as well as non-price variables, for two different sub-periods
have been employed to explore the above relationship and its changes (if any)
in the subsequent period. The findings confirm that the open-interest-based predictors—for
both the periods—are found to be significant in predicting the future price
in the underlying cash market. But, as far as the volume-based predictors are
concerned, it shows some mixed evidence. Though insignificant just after initiation,
the volume-based predictors are found to be statistically significant in the later
sub-period. Though both the predictors during the recent sub-period are significant
at any conventional level of significance, the trading volume shows some more
impact when compared to open interest in the matter of price prediction in the
cash market. The significant increase in the value of adjusted R-square and F-statistics
in the subsequent period also exhibits improvement in the informational role played
by the Indian options market. ©
2007 IUP . All Rights Reserved.
Lucas Critique
and Indian Economic Activities
-- Hirak Ray The
central theme of `Lucas Critique' is that, the parameters estimated from an econometric
model are not invariant in the presence of economic policy changes. In India,
economic policy planners have tried three different `economic policy' agendas
since Independence. This paper attempts to assess the relevance of the `critique'
with the economic activities of India represented by six macrovariables—the
growth of money supply, change in wholesale price index, yield on long-term government
bonds, yield on 91-days treasury bills, rate of return of the risk-assets, and
growth in industrial production. Empirical evidences indicate that the policy
shifts have influenced the Indian economic activities positively. ©
2007 IUP . All Rights Reserved.
Capital Budgeting
Practices in
Punjab-based Companies
-- Sanjeev
Gupta, Roopali Batra and Manisha Sharma Investment
decision, popularly known as capital budgeting decision, is one of the most important
decisions that finance managers have to take. In the current era of globalization
and competition, selection of profitable investment opportunities is a must for
the survival of any company. A number of studies have shown that companies employ
several capital budgeting techniques while selecting a project. Based on a primary
survey, the present study examines the current status of capital budgeting and
explores the techniques preferred by Punjab-based companies. The study also seeks
to find whether the factors such as size of capital budget, age of the company
and nature of industry have any influence on the choice of capital budgeting methods.
As it is found that most of the companies pursue non-discounted methods, the study
suggests that they adopt techniques like Net Present Value (NPV) and Internal
Rate of Return (IRR), which could deliver better results. ©
2007 IUP . All Rights Reserved.
Are
There Trends towards Market Efficiency? A
Study of the Indian Stock Market
-- Ash
Narayan Sah and G Omkarnath The
financial sector liberalization in India was initiated on the basis of the recommendations
of the Narasimham Committee on Financial System. In particular, the reform of
the Indian stock market was guided by two broad themes—structural transformation
and speedy access to information. A decade of reform has brought about a radical
transformation of the Indian stock market. This study employed the GARCH-M model
to test the efficiency of the stock market in India, along with various autocorrelation
tests for different sub-samples, using the daily data on S&P CNX Nifty from
January 1, 1996 to March 31, 2005. The results suggest that there are periods
of efficiency in its weak form, followed by inefficiency. The observed inefficiency,
particularly after the introduction of futures and option in returns may be due
to some dynamics in higher order moments of the residuals. ©
2007 IUP . All Rights Reserved. | 
